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Today wrapped up the final day at FPA Denver 2010. Despite the hard rain falling outside in the morning, attendee energy was high as the final two educational tracks were conducted before the conference’s conclusion. Here are my highlights from the final day.

I attended the panel discussion on rebalancing software moderated by David Drucker of Technology Tools for Today. Panelists included Damon Deru of Nine Mile Software (makers of TradeWarrior), Jinnan Zhou of Morningstar Office, Matt Springer of Tamarac Inc., and Ben Welch of TD AMERITRADE Institutional’s iRebal.

The introductions by a few presenters were fairly lengthy, so it cut down on the time Drucker had to challenge each vendor regarding their respective software platforms. Here are some of the answers from the panelists on select questions.

Cost Basis

All programs currently support lot identification when creating trades, and Tamarac and iRebal expect to coordinate lot accounting information with custodial trading systems to facilitate cost basis tracking requirements coming in 2011.

Success Stories

Welch shared an iRebal success story where an advisory firm grew from managing $200 million in AUM to $400 million via organic growth and acquisitions without having to add staff to manage increased trading. Springer’s success story on Tamarac featured one solo advisor strictly doing asset management for clients who grew to manage $700 million. It used to take this advisor three months to rebalance accounts without software, but the time was reduced to just one day after the addition of Tamarac.

Deru shared a similar story about TradeWarrior regarding a new breakaway broker using TradeWarrior to significantly cut down the time the firm spent rebalancing accounts.

Settlement Dates

When asked about differing settlement dates when trading mutual funds, Tamarac and iRebal support the addition of “hold dates” to delay a fund purchase until after settlement of a corresponding sale. This allows advisors to avoid incurring margin interest due to uncoordinated settlement. If I understood the panelists, Morningstar Office and TradeWarrior recommend that a trade file be generated but not submitted to the custodian until after the settlement date of the fund sales.

Options

All programs can account for “alternative positions” that are manually entered into the programs, including options. The alternatives are used to determine asset allocations, but no trades are generated for the option positions.

Pricing

According to each company’s representative, here are ballpark annual costs for the software:

• The minimum fee to purchase iRebal is approximately $20,000.
• Tamarac’s minimum is around $10,000 and they feature a “growing advisor” incentive for smaller firms (in terms of AUM).
• Morningstar Office rebalancing is offered somewhere between $5,000 and $10,000.
• TradeWarrior’s pricing is approximately $5,000

(if you represent any of the firms, let me know about more accurate pricing)

Onboard Process

As iRebal’s market focus is on larger, more customized asset management firms, they estimate that the average implementation time is three months from sign up to full production. Tamarac estimates the training and installation process to last between 30 and 60 days. Tamarac also offers a two day university training program to all new firms.

Morningstar Office can be implemented in about thirty days, and TradeWarrior’s setup and training lasts about two to three weeks.

In all cases, advisors can streamline process by preparing model portfolios and rule preferences in advance.

That wrapped up the session, and I missed the final track block in order to check out, eat, and head to the airport (where I put the final touches on this post using WordPress for iPad).

I hope you enjoyed the conference updates and got a good feel of this year’s event. I’m looking forward to next year’s conference in San Diego already!

Now that my presentation responsibilities are finished, I get to take in FPA Denver 2010 in attendee mode.

First off for me today was a session from Edward O’Brien and George Baumgarten of Fidelity Institutional Wealth Services discussing the effective use of CRM in a financial planning practice. Both provided a good general overview of the ways CRM can streamline workflow, document client interactions, and decrease the firm’s dependency on one advisor or employee with exclusive knowledge about the firm’s processes. While a little light on specific lessons, advisors still need to hear the message that one of the core components of a firm’s technology is a suitable and capable CRM.

Next up was a panel discussion titled Outsourcing Portfolio Management with Dan Skiles of Shareholders Service Group moderating with advisors Jeffery Fanning, William Moss, & Ted Rich on the panel. There was a good representation of the outsourced provider market: Fanning’s firm uses Morningstar Office, Moss’s firm uses Schwab Performance Technologies, and Rich’s firm uses Black Diamond Performance Reporting.

All three panelists said how important it was to focus on their core business and service model and outsource everything else. I was really impressed with the level of technology adoption by Rich’s firm, Vinoy Capital in Orlando, FL. I hope to revisit my notes on this session and post them separately as there was a ton of excellent information in this session.

After the lunch break and exhibitor conversations, I sat in on the session by Neesha Hathi of Schwab Advisor Services as she discussed the evolution of an advisor’s office. I was really hopeful that Hathi would provide a sneak preview of Intelligent Integration, but the session was more of an overview of data from the most recent Schwab advisor survey. Also the presentation slide deck was hard to see; the font size really needed to be much, much larger, especially for the size of the room.

The final keynote of FPA Denver 2010 featured Ian Bremmer, a political scientist and author, who provided a fairly neutral view of the global political climate and identified potential risks to international investments due to political instability. There may not have been direct implications for financial planners and how they match client goals with their finances, but I found it useful to hear about his thoughts on what may happen over the next 12-18 months.

The day ended with the closing reception where attendees took advantage of the time to share the highs and lows of the conference. I connected with many new people and visited with old friends. Tomorrow features the two remaining educations tracks to wrap up FPA Denver 2010. Check back tomorrow for the final update from the conference.

Today was Day 2 of FPA Denver 2010, filled with education sessions, exhibitor highlights, and a keynote session from David Wessel titled Will The Great Recession Be Followed By The Great Stagnation?

This Day 2 update is short as I delivered my presentation this morning on emerging trends in financial service technology. Afterwards I fielded some excellent questions from attendees, so I missed the sessions that started at 10:00.

I did manage to see Joel P. Bruckenstein’s session on cloud computing information for financial planners. Bruckenstein did a good job identifying the abundant (and sometimes overwhelming) options advisors have to move their tools and applications to the cloud.

Following the lunch reception in the exhibit hall were presentations by TD AMERITRADE Institutional and Don Trone. Since I was up at 3:30 in the morning for no apparent reason, I retreated back to my room for a quick recharge.

The day wrapped up with an excellent session by David Wessel, and many of the best takeaways from his presentation were tweeted out during the event. Search Twitter for Wessel and the #FPA2010 hash tag for his perspective.

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